‘Disgusting’: Ubank freezes pensioner’s account for a month

A Brisbane woman has accused Ubank of “disgusting” behaviour after the online lender froze access to her elderly mother’s account for weeks, leaving her unable to pay for rent, medical bills or even food.

Janet Benton, 74, transferred her remaining superannuation of nearly $20,000 from St George into a newly-opened Ubank high-interest savings account in late September.

But within a week, she was locked out “due to some concerns about who was accessing Janet’s accounts”, the NAB-owned bank later explained.

The pensioner, who suffers severe anxiety, lives in Brisbane with her daughter and carer Catherine Cush, 42.

Ms Cush says she regularly helps her mother with paperwork and to make phone calls — which triggered red flags at the bank for possible fraud or elder abuse, freezing the account.

Despite Ms Benton twice completing identity checks, Ubank refused to unfreeze the account or even, according to Ms Cush, give them a clear explanation.

After a week without answers they lodged an internal complaint with the bank, and after another week they went to the Australian Financial Complaints Authority (AFCA).

“It’s so frustrating, it’s ridiculous,” Ms Cush said.

“I don’t know how a bank could do this. I thought maybe they suspect elder abuse, but how are they protecting the elderly by denying them access (to money) to buy bread and milk? We had little to no food, we exhausted the charities.

“We highlighted the need to access funds for basic essentials, urgent vet care required for her cat. We called Ubank every day only to be refused any transfers to the complaint team.”

Early last month Ubank gave Ms Benton $150 to pay for a medical scan, but still would not unfreeze her account.

Eventually the bank requested Ms Cush provide power-of-attorney documentation, which was received on October 25.

“Mum said I don’t think I need it, I’ve got all my faculties, but in desperation (to regain access) to pay bills we got it done,” Ms Cush said.

On Tuesday this week, Ubank finally provided a response to the AFCA complaint, with a “goodwill offer” of $250 for the “full and final resolution” of the matter.

“It’s beyond ridiculous,” Ms Cush said.

The account remained frozen and Ubank’s letter did not provide any timeline for releasing the funds.

Her mother had requested that the Ubank account be closed and the money be transferred to ANZ.

“I’m on a low income and have my own bills to pay and can’t continue to support both of us,” Ms Cush said. “Rent is now a week behind.”

In its letter, Ubank said “we acknowledge this matter has caused some challenges and frustrations, and am (sic) sorry for this”.

“Though we stand by the actions taken by Ubank being necessary, we appreciate that in doing so, has placed financial inconvenience on Janet,” it said.

Ubank said it had a “simple approach to banking that only allows for the named account holder to access the banking”.

“This approach applies to all customers, and does not accommodate for personal agreements between account holders and trusted family members, meaning that where Ubank suspects an individual other than the named account holder is accessing the banking, we must take action to protect the accounts and funds,” it said.

“In this case, we believe there was sufficient reason to form a view, someone other than Janet was accessing her banking, being unauthorised access, which is in direct conflict with our general terms and meant we needed to regain confidence Janet was aware of her banking situation. Once this was established, we then needed to understand how to best assist Janet with her banking needs, as it was apparent that a Ubank account was not suitable to her circumstances.”

Ubank said it acknowledged their concerns about the “need to access the funds” but that the freeze was justified “given the genuine concerns that unauthorised access was taking place, and the time required to address these concerns”.

“In this aspect, we believe Ubank has acted appropriately, and carried out our regulatory responsibilities in doing so,” it said.

“When looking to regain access to the funds, we are unable to agree to access the funds at this time direct from the Ubank account, yet understand the preferred outcome is to close all Ubank accounts and transfer the remaining balance to the ANZ account held by Janet.

“At this time, we are finalising the necessary actions needed to see this happen, and am [sic] sorry to advise that we are not able to provide this outcome to you when sending this request.”

Ms Cush said she had worked in finance and understood banks had obligations to prevent fraud and abuse, but that Ubank’s conduct had been “disgusting”.

“There comes a time where this is a criminal matter almost,” she said. “If someone robbed my mum of $18,000 in her purse (they would be arrested), but because it’s a bank it’s OK.”

On Friday afternoon, after receiving an inquiry for this article, the bank informed Ms Cush and her mother that the account had been closed and the funds transferred to ANZ, with an increased offer of $500 as a “fair resolution”.

A Ubank spokeswoman said while the bank “cannot comment on specific customer matters, we have been working proactively with the customer to reach an outcome”.

“All banks, including Ubank, play a crucial role in keeping customers’ financial information safe,” she said.

“In circumstances when a customer wishes to grant access to an account or authorise someone to manage their financial affairs on their behalf, we need to follow strict verification steps. This means checking identities carefully, explaining the rules clearly, and keeping an eye out for any suspicious activity. By doing this, banks help protect customers’ money and build trust in the financial system.”

AFCA said it was unable to comment due to confidentiality and privacy rules governing its work as an ombudsman service.

frank.chung@news.com.au